Citrix Commissions Partners For Software-As-A-Service

Though Citrix Systems is well-known in the channel, one of the Fort Lauderdale, Fla.-based software company&'s fastest-growing businesses is its lesser-known online division, which sells software-as-a-service offerings such as remote access, Web conferencing and help-desk support. This year, Citrix Online expects to grow by at least 50 percent. In an interview with editor in chief Michael Vizard, Citrix president Brett Caine gives his take on how software-as-a-service offerings are helping solution providers embrace new recurring revenue opportunities.

CRN: How do you work with the rest of the Citrix channel?

CAINE: We&'re doing a couple of things concurrently. One is we&'ve consolidated our partner program with the Citrix Access Network partner program. It&'s one program for all Citrix solution providers. In addition, we have about 1,100 partners, and about 200 of them are Citrix solution providers. That&'s growing more every day. ... We also have a channel exchange program. For example, we just introduced GoToAssist into the Intel Channel Partner Program. So if you&'re an Intel VAR, you can get GoToAssist as part of your affiliation with Intel. In total, there are about 700 [VARs] dealing directly with us today.

CRN: What percentage of your business is coming from corporate sales?

CAINE: Corporate business is about 45 percent of our business. Of that business, about 15 percent was through the channel 12 months ago. [In] the most recent quarter [it] was 25 percent. Exiting this year, I think it will be at least 35 percent of our business. I see that the channel will become an increasingly larger part of our corporate business.

CRN: Given your software-as-a-service business model, what makes your products attractive to VARs?

CAINE: In our business model, there&'s a recurring commission opportunity. More than 90 percent of our customers renew their annual contracts every year. But if you work with us and sell a new customer, we&'ll pay a commission up front. Then when that customer renews, we&'ll pay it again. We do it every year thereafter. It&'s expanding the footprint and ensuring that the customer renews. Every quarter, 30 percent to 40 percent of our customers buy more licenses. The partner would participate in that upside as well. I want our teams to work with the channel and educate them and make the whole thing work.

CRN: How did Citrix&'s online business come about?

CAINE: We started as ExpertCity. We were acquired by Citrix a little more than a year ago and became Citrix Online. Our approach to the market is we are very focused on realtime collaboration and remote-access services. We offer a set of technologies, products and solutions in that market, such as GoToMyPC, for remote-access service, and GoToAssist, our online support application. We believe that Web-based applications that we deliver will become as ubiquitous as e-mail.

CRN: How well is the remote-support business doing?

CAINE: We are seeing expansion of our GoToAssist business all over the place. This product grew 92 percent year-over-year last year. We only sell to companies like VARs, IT consultants, small- and medium-size companies, and very large companies. We do not sell this product online to consumers through our e-commerce site. A VAR&'s customers are going to hit their portal, which we essentially host for you. For example, Best Software has offered GoToAssist to their VARs as part of a best-practices model that they want their VARs to adapt and evolve to. That&'s been very successful.

CRN: The opportunity for solution providers with GoToAssist is pretty clear. How much opportunity is there for the Web conferencing service?

CAINE: GoToMeeting is growing like crazy. It just grew 106 percent quarter to quarter. More than 50 percent of those customers are switching from one of the other providers in the market. We have introduced a licensing model that is very compelling to the market. It&'s called All You Can Meet. For a single monthly fee, you—as an organizer—can have as many meetings as you want and for as long as you want for that flat fee. And there are no overcharges. You don&'t have to predict how many minutes you&'re going to use or how many people are going to attend the meeting. As a result, people are coming to GoToMeeting in droves.

CRN: 3am Labs has emerged as a competitor to GoToMyPC. How do you see 3am as a rival?

CAINE: They&'re peer-to-peer technology. They offer essentially a free service or a free-to-fee service. It will be interesting to see if they can make free a real business model. GoToMyPC grew 56 percent year-over-year last year. It grew again in the most recent quarter [more than] 13 percent. It&'s very profitable. With our reach through Citrix and our general presence in the market, I think it will be difficult for somebody to catch up to us with a free model.